It seeks to provide a competitive edge to its customers through a wide variety of standard high quality products as well as items customized to their requirements such as special purpose machines, metalworking tools, customized tooling solutions and engineered products.

June 2017 quarter results

For the quarter ended June 2017, sales grew 11% to Rs 171.59 crore. OPM fell 100 basis points from 9.4% to 8.4% which saw OP fall 1% to Rs 14.47 crore.

Other income fell 3% to Rs 3.36 crore. Interest cost was nil as the company is a debt free company.

As depreciation grew 21% to Rs 7.43 crore, PBT fell 13% to Rs 10.40 crore.

EO loss was Rs 5.50 crore against Nil. Thus PBT after EO fell 59% to Rs 4.90 crore.

EO for VRS was Rs 2.39 crore and EO for Employee separation scheme was Rs 3.11 crore.

As provision for taxation fell 13% to Rs 4.12 crore, PAT fell 89% to Rs 78 lakh.

FY 2017 results (ending June)

For FY 2017 (ending June), sales grew 14% to Rs 648.53 crore. OPM improved 40 basis points from 8.1% to 8.5% which saw OP grow 19% to Rs 54.85 crore.

Other income grew 3% to Rs 9.18 crore. Interest cost was nil as the company is a debt free company. As depreciation grew 17% to Rs 28.26 crore, PBT grew 16% to Rs 35.77 crore.

EO loss was Rs 5.50 crore against Nil. Thus PBT after EO fell 1% to Rs 30.27 crore.

As provision for taxation fell 18% to Rs 8.17 crore, PAT grew 7% to Rs 22.10 crore.

Quarter Segment results

For the quarter, sales from the Machine Tools division grew 38% to Rs 28.29 crore and accounted for 16% of sales. PBIT from the same fell 44% to Rs 2.46 crore and accounted for 13% of total.

For the quarter, sales from the Hard Metals and Hard Metals Products grew 7% to Rs 143.30 crore and accounted for 84% of sales. PBIT from the same grew 41% to Rs 16.25 crore and accounted for 87% of total.

For FY 2017, sales from the Machine Tools division grew 3% to Rs 96.23 crore and accounted for 15% of sales. PBIT from the same grew 15% to Rs 9.02 crore and accounted for 14% of total.

For FY 2017, sales from the Hard Metals and Hard Metals Products grew 16% to Rs 552.30 crore and accounted for 85% of sales. PBIT from the same grew 27% to Rs 54.80 crore and accounted for 86% of total.

Market condition

The company serves markets like Automobile (2W, PV, LCV and MHCV), tractors which have been performing well. Aerospace, Defence and railways are also doing well.

However other segments like steel, capital investments in manufacturing (including greenfield activities), Oil & Gas Energy and Mining which were laggards.

Strategy

Going forward the company hopes to consolidate and grow its core business and enhance its market reach by expanding distribution channel.

It also plans to diversify and has increased focus in aerospace, defence, railways segments.

It is also exploring exports of its Machining Solutions Group (MSG) products.

The company has taken special initiatives to grow the WIDIA business.

It will continue to modernize and upgrade its manufacturing facilities.

Valuation

The share price trades at Rs 624.